Kotak Securities’ research report on Kajaria Ceramics
Kajaria Ceramics results were ahead of our estimates led by healthy volume growth and marginal sequential improvement in realization. Margin decline on YoY basis was expected due to higher gas prices but sequentially gas prices have corrected sharply during the quarter thereby aiding margins. Volume growth is likely to be strong and further margin improvement is expected in coming quarters with reduction in gas prices. Performance of JVs is also improving.
Stock is currently trading at valuations of 34.4x and 28.1x P/E on FY19 and FY20 estimates respectively. We revise our estimates to factor in lower gas prices translating into higher margins and arrive at a revised target price of Rs 572 on FY20 estimates (Rs 500 earlier).
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First Published on Feb 5, 2019 04:16 pm